It raised its target price to HK$7.30 from HK$6.10 on higher topline growth assumptions.

“We expect Want Want to enjoy a stronger topline on the back of strong dairy demand industry growth and its distribution channel optimisation bearing fruit,” the note on Wednesday said. It also pointed to easing margin pressure as key raw material prices, such as domestic sugar and milk powder prices, were on a downtrend

It also noted Want Want is focusing on new product development, including upgrading its rice cracker products, launching alcoholic fruit drinks, a new popsicle product and a new high-protein milk.

CGS-CIMB said the current valuation was attractive as the stock only traded at 18.7 times fiscal 2019 price-to-earnings, below its five-year historical average of 21.0 times price-to-earnings and compared with its peer group’s 21.9 times fiscal 2019 price-to-earnings.

The stock was up 1.42 percent at HK$6.42 at 10:40 A.M. SGT on Thursday.